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Examining ExxonMobil and Chevron Ahead of Q4 Earnings Examining ExxonMobil and Chevron Ahead of Q4 Earnings

Exxon Mobil Corp XOM and Chevron Corp CVX are two colossal entities in the energy sector, each wielding substantial influence over the global oil and gas industry. Both energy juggernauts are gearing up to disclose their fourth-quarter earnings on February 2, before the market commences its daily activities.

At the projected Q4 earnings, ExxonMobil is anticipated to report $2.04 in EPS and $79.28 billion in revenues, while Chevron is expected to unveil $2.96 in EPS and $47.61 billion in revenues.

While both companies operate within the same industry and have undergone metamorphoses through acquisitions and mergers, they exhibit distinctive differences in their operational strategies, financials, and initiatives.

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Operational Focus

One of the crucial distinctions lies in their operational focus. ExxonMobil places a strong emphasis on upstream operations, encompassing exploration and production, with a global reach that extends across multiple continents. For 2024, ExxonMobil intends to maintain its oil output, while depending on the additional production from Pioneer for growth.

On the other hand, Chevron, while also active in upstream activities, balances its portfolio with a significant presence in downstream operations, such as refining and marketing. In 2024, Chevron is targeting an escalation in oil production.

2024 Production & Spending Targets

ExxonMobil and Chevron have established distinct capital spending and production targets for 2024. Chevron is striving for a substantial increase in oil output, bolstered by its landmark deals in 2023, including a $53 billion purchase of Hess and a $6.3 billion acquisition of PDC Energy.

Conversely, ExxonMobil is maintaining steady production levels in its plan but anticipates growth through added output from its $60 billion acquisition of Pioneer Natural Resources in the Permian Basin.

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In terms of spending, ExxonMobil is allocating a substantial budget of over $20 billion for lower-emissions opportunities until 2027, signifying a noteworthy escalation from the initial $3 billion planned in 2021.

On the other hand, Chevron aims to boost capital spending in 2024, projecting a range between $18.5 billion and $19.5 billion, reflecting an 11% increase from the previous year. Furthermore, Chevron foresees annual spending between $19 billion and $22 billion through 2027.

Sustainability Efforts

Regarding sustainability efforts, ExxonMobil is making significant investments in lower-emissions opportunities, with a specific emphasis on carbon capture. Furthermore, Exxon strategically acquired Denbury for $5 billion, securing a carbon dioxide transportation pipeline.

In addition to its carbon-related endeavors, Exxon is venturing into the electric vehicle sector, aiming to produce lithium by 2027 and endeavoring to be a leading lithium supplier for electric vehicles by 2030.

Valuation

ExxonMobil and Chevron closely align in terms of valuation.

Data compiled from Yahoo Finance

Trailing and forward price multiples compare head on when it comes to these two energy giants.

Let’s look at what analysts consensus says:

Data compiled from Yahoo Finance

Presently, analysts seem to favor ExxonMobil, with the stock offering 21.7% upside in comparison to Chevron’s 19.49% upside.

Certainly, both stocks are evenly matched ahead of Q4 earnings. However, their Q4 earnings reports on Friday may prompt analysts to reassess their investment stance on these stocks. Investors might consider waiting for any significant announcements that may cause analysts to reconsider their ratings before deciding between these stocks.

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